The state Hawaii Community Development Authority board voted yesterday to approve transferring the lease for the John Dominis restaurant site in Kakaako.

The new owner of the site, Japan-based Ocean Investments LLC, faces drastically increased lease rent -- which the current owner, D.G. "Andy" Anderson, says is already too expensive to support its current restaurant use.

The parcel is zoned waterfront commercial, according to Richard Kuitunen, HCDA's asset manager, and could be used for retail, office or even a hotel, with a a 65-foot height limit.

Ocean Investments has agreed to an annual rent of $320,611 next year, significantly higher than the current annual rent of $189,840 paid by Andersen's Basin Project Inc. One of the leases starts in January and the other in June.

Anderson says he has an 18-month leaseback agreement with Ocean Investments, during which he would continue to operate John Dominis and the adjoining chapel. There are about 100 employees.

"There will be no changes in employees, staff or management," he said.

But after that, the new owner would be able to develop a new commercial waterfront project for the two parcels, which together measure 37,787 square feet, close to an acre.

Any redevelopment plans would remain subject to HCDA oversight.

"If they do improvements to the property, they would have to come back to the authority for approval," he said.

The site lease, which began in 1978, is good until 2042, with renegotiations every 10 years. The John Dominis restaurant opened at Kewalo in 1979.

Anderson in 2004 had proposed a mixed-use development next to John Dominis, which would have included a world trade center with architecture evoking the sails of a Hawaiian voyaging canoe. His proposal was never accepted by HCDA.

"The state Legislature and state administration just can't make up its mind what they want to do out there," said Anderson. "For 15 years that land has sat fallow and unproductive."

So after the increase in ground rent and property taxes, he said it was time to pass on the lease. If he were to stay on, he estimated his costs would have gone up more than 30 percent.

"It needs major renovation," he said of John Dominis. "You've got to better utilize the property. Paying the bills as a restaurant, you just can't do it."

The 11,000-square-foot restaurant seats 254, and features a small koi pond and ocean views.

"That's really too big for today's market," he said. "You go to Roy's, you go to Alan Wong's, and 130 (seats) is a good number at one time. It's just a lot of square footage."

Anderson said Ocean Investments initially approached him through their attorneys after a deal with Watabe Wedding Corp. did not pan out. Ocean Investments is represented by McCorriston Miller Mukai MacKinnon LP. Attorneys declined to comment on the transaction.

Anderson said he will be sad to part with John Dominis.

"It's like my firstborn," he said. "Everyone thought I was crazy to be way out there."